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MOOCs, Disruptive Innovation, and IT at a university. (Or Lions, and Tigers, and Bears, Oh my.)

If you’re really busy the take away is that MOOCs are probably not the dinosaur killer, but they are a great experiment to determine what might work. They are a portent of things to come in an industry that is ripe for disruption.

Are MOOCS a game changer? The real question is “What is the future of higher education?” In America? Around the world? To get around to that one should give some consideration regarding the goals of higher education. If you ask many at a university, they would probably talk about student success, learning outcomes, and perhaps a few who talk about the Aristotelian or Jeffersonian ideals that embody a liberal arts education. But, that last bit is your own fault if you find yourself asking philosophy professors philosophical questions. If you ask most students or their parents, they would talk about education as a means to a quality life with a “good” job or career, and some personal sense of fulfillment. Treble that if you’re talking to a non-traditional or mid-career person who is looking to advance their own situation and need education/credentials to do that. (Politics aside, there are more of this demographic than traditional 18-22 year old students in most markets. And they need education to meet their needs, rather than the other way around.)

One may argue that the function of higher education is to provide a few things:

1) Learning in both a classroom and experiential setting

2) Credentialing for that learning for the benefit of a third party (e.g., an employer, graduate school, etc.)

3) Expanding the scope of human knowledge and understanding

4) Connecting to an alumni network

This arrangement has worked well, more or less, for just under a thousand years. However, there are forces at play that have the potential to significantly disrupt this venerable tradition. In America since 1985, tuition has increased 500%, compared to general inflation of 121% and health care costs of 286% outpaced general inflation and health care inflation. US Students carry roughly $1.2 Trillion in debt, which is having profound effects on how young adults start their careers, start their families, and buy their first homes (Notte, 2013). Sebastian Thrun of Udacity states, “We spend approximately $400 billion annually on universities, a figure greater than the revenues of Amazon, Apple, Facebook, Google, Microsoft, and Twitter combined” (Chafkin, 2013). On a global level, one sees education, particularly engineering and science disciplines, not only as a means to an upper middle class life, but also as an escape from poverty.

At the same time technology has allowed us to be connected in a way that eradicates the difficulty of distance and, to some degree, time. Currently, Coursera, MITx, and Udacity are all new ventures experimenting with formulas to provide global and free access to world-class education through Massive Open Online Courses (MOOCs). Currently, 2.6% of higher education institutions have a MOOC; 9.4% are in the planning stages; 57% are undecided; and 32.7% have no plans for a MOOC. (Allen and Seaman, 2013). The general perception amongst Chief Academic Officers (CAOs) is that MOOCS are good experimental landscape for online pedagogy, but that MOOCS are not sustainable. Some of the barriers include faculty resistance (it’s a lot of work!); increased level of discipline needed for students to complete successfully; lower retention rates; and lack of credibility (Allen and Seaman, 2013). Also, from Allen and Seaman comes the fact that at the time of their research in 2013 ~6.7M students were taking an online course, which is why 69.1% of CAO’s think that, regardless of MOOCS, online learning is a key long term strategy for their institutions.

If one examines the course statistics around MOOCS, the successful completion rate is ~7%, which led Udacity founder, Sebastian Thrun to call it a “lousy product.” (Chafkin, 2013). Of course this recognition is leading Thrun to increase the quality of outcomes, not throw in the towel. One software engineering course from EPFL, a leading Swiss technical university, showed a 19% completion rate. (Miller, Haller, Rytz & Odersky, 2014). They attributed their success to innovative methods related to innovative course supporting tools (e.g., automated graders for code, etc.) and tight feedback loops between students and faculty. A MITx study showed that collaboration between students increased the likelihood of completion as well (DeBoer, Seaton, Stump & Breslow, 2013).

One study attempted to use sentiment analysis across the discussion boards to determine if the general tone of the comments were positive or negative and what the trend was across the course schedule. The course was consistently positive, which yielded no specific results but was a novel approach that could be re-worked to ask different questions in additional studies (Koutropoulos, Gallagher, Abajian, de Waard, Hogue, Keskin & Rodriguez, 2012). This type of data mining analysis is eventually going to give up leading indicators as to what is causal to completion or abandonment. The Koutropolous, et. al. study also recognized that most in the course are “lurkers” who actively read content, but do not create content on their own. Another interesting side note from this study is that around week three of the course, the technology for the active contributors led to a sense of intimacy as evidenced by use of first names and general tonality.

One fact across multiple studies is that most of the participants already have a Bachelors or Masters degree. In the EPFL study 35% had a Bachelors, 45% had a Masters, 10% were in their undergrad, and 5% were in high school. (Miller, Haller, Rytz & Odersky, 2014). In a MITx “Circuits and Electronics” Sophomore level course that had ~150k enrollment, 1173 responded to a survey that reported 36.6% had a Bachelors, 27.87% had a Masters, and 26.68% were in high school. (DeBoer, Seaton, Stump & Breslow, 2013). The MITx study also ranked the number of enrollees by country as well as their completion rates. In order of number of enrolled students they are as follows (with % complete in parenthesis): US (5% complete); India (6.4% complete); UK (6.5% complete); Columbia (7.7% complete). Number seven in enrollees Spain was actually first in completions with 14.5% complete. There was no attribution as to why.

From the respondent to the MITx study, motivations for taking a MOOC are reported as follows: gaining knowledge (55%); personal challenge (25.58%); gain or advance employment (8.27%); entertainment (4.52%); and seeking social credibility (.43%). A very favorable use of a MOOC was as a “wrapper course” (akin to the inverted classroom model) where the lectures were delivered by the Stanford MOOC professor online outside of “class” and the local Vanderbilt professor held in-class discussion groups to apply concepts. The closer the MOOC course and the face-to-face course were in sync the higher the satisfaction (Bruff, Fisher, McEwen & Smith, 2013). This wrapper concept could be extremely disruptive over time.

Younger faculty tend to see MOOCS as a vehicle for to have an impact in that one can reach more in one semester than in a lifetime of traditional teaching. (Kellogg, 2013) Kellog also recommended some best practices from a faculty standpoint: set learning goals, make interactive, hire assistant to monitor forums, encourage collaboration, collect data to improve.

Outside of the classroom, two major obstacles exist to MOOCS: digital divide issues and path to monetization. In a study that examined K-12 students use of technology through wikis, it was determined that low income students had fewer opportunities to interact with the wikis and that the wikis faded out of use much quicker than with affluent students. “There is a great danger that the promise and potential of free Web 2.0 tools will disproportionately benefit those already advantaged.” (Reich, Murnane & Willett, 2012). Similarly, Udacity’s did an experiment with a San Jose State pilot that showed them that low income wasn’t a good mix for MOOC-style learning. According to Sebastian Thrun, “These were students from difficult neighborhoods, without good access to computers, and with all kinds of challenges in their lives,” he says. “It’s a group for which this medium is not a good fit.” (Chafkin, 2013).

As to the path to monetization, right now venture capital and intellectual curiosity are keeping the MOOC phenomenon alive ($22M in external funding for Coursera). (Young, 2012). The Coursera joint ventures between the MOOC providers and established universities, the universities’ cut will be 6-15% of the revenue and 20% of the gross profit. But they are searching for other paths too. Advertising is an easy concept within the Silicon Valley startups, as is corporate sponsored education (Young 2012). For instance the $6k GA Tech Masters degree MOOC is really being underwritten by ATT as an experiment that also may lead them to some excellent talent. Coursera is actively pursuing two ideas: the concepts of having students pay for certificates for completion and serving as a matchmaker between students and employers (Lewin, 2012). They will use photo ID (from the computer) and typing pattern recognition to verify the student of record actually took the assessments. (Young, 2013).

Personal MOOC Experience

My own personal interaction with MOOCS bears out the statistics. I love learning, and the variety of excellent material out there is exciting to me. This fall I signed up for several courses based on interest. A Strategy course from UPenn business school, a big data in higher ed course, and an emotional intelligence based leadership course. All of these are fantastically interesting to me. I even paid money for a certificate for the emotional intelligence course. I know the theories that the more I commit; the more likely I am to follow through. However, in each case, I downloaded a few lectures and watched them. Very good stuff! I posted to a few discussion boards and allowed myself to be taken in by the game mechanics. In the end though, I am a ninety-three percenter because I quit. Actually, I didn’t even quit…I abandoned the course. The discussion boards were easy to navigate, the materials were easy to access, and the material was interesting to me. Part of me thinks that I am overcommitted and of the things in my life that could be set aside, the MOOCS were an easy decision. Except that there wasn’t a “decision” as it were. I just stopped logging in, and perhaps went into a little avoidance behavior. The big data course, I never even opened up after abandoning the others, despite a few consistent emails telling me about what’s happening in the course. It’s like the course doesn’t even know we broke up. Part of it for me is that it would be nice to have a master schedule that laid out what was due when across multiple courses. I got caught up in the logistics of trying to cram more things in my life, and I needed an “easy button.” This may sound incredibly self-entitled; however, this would likely have made a difference on whether or not I completed the course. For me it was about time allocation and budgeting, and the MOOC format isn’t a good one for me in that regard. I will download the content to view at my own leisure, much as I would read a book for pleasure, but the drive to have it as a “course” is low for me at this point in my life.

From the research and from personal experience, I think that the higher education vertical is in a state ripe for disruption. From a supply side and a demand side, the need for change is great, and I believe we will see this in my lifetime; however, I don’t think MOOCS are it. Again, the consensus is that MOOCS are an experimental model, rather than THE answer. Andrew Kelly, the director of the Center on Higher Education Reform at the American Enterprise Institute states, “The sort of simplistic suggestion that MOOCs are going to disrupt the entire education system is very premature.” (Chafkin, 2013) They are a portent of things to come, and in the startup mantra of “fail fast to succeed,” I believe that as the players iterate we will find a sustainable answer to how we educate the students of tomorrow. Hopefully, this will come in time to relieve my family of the burden of paying for my three young children to go to college. If not though, we will find a way to get them what they need so that they can reach their fullest potential.

Implications of Disruptive Technologies

Before we get into the thick of the implications, it may be useful to talk about disruption and innovation. “Clayton Christensen says that a disruption displaces an existing market, industry, or technology and produces something new and more efficient and worthwhile. It is at once destructive and creative.” (Howard, 2013). There is also uncertainty with disruption and how the market will react to the disruption. Some examples of disruptors: Netflix v Blockbuster; digital cameras v Kodak; Seiko digital watches v Swiss gear watchs; Dell low cost PC v IBM high end PC.

Many times a larger company can sense the disruption, but due to the established incumbent position—existing market share, culture, resource scarcity, etc.– it chooses to ignore while a new market is established. Essentially, they are risk averse at their own peril. (Garrison, 2009). Garrison states the following:

“Larger organizations tend to become more structurally rigid, potentially constraining the ability of managers to adopt disruptive technologies. Additionally, larger organizations could possibly face greater challenges altering their existing strategy in favor of implementing a new one; not to mention the difficulty in allocating the necessary resources required to supplant existing routines and processes that support the functioning of their core competencies.”

Here is a typical cycle: disruption starts as an inferior product that attracts a different market than the incumbent, the incumbent ignores for the reasons stated above, the toe hold in the market gained by the disruptor is used to iterate and begin losing the inferior status and attract primary consumers of the incumbent (Adner, 2002). One strategy businesses use to overcome this tendency is to create a separate unit which can break free from existing corporate rigors and answer the challenge of a disruptor/competitor (Markides, 2006).

Another point that should be made is that sometime “technology disruption” is confused with “business model disruption.” In the case of Amazon, technology supported a supply chain that disrupted the business model of Barnes and Noble and brick and mortar resellers, but it truly was a business model disruption (Markides, 2006). Later, of course, technology furthered this with the Kindle to develop Amazon as an ecosystem rather than “just” a retailer. In Table 1, Markides gives examples of new v established business models.

Care should also be given to disruptions that are technologically driven rather than market driven. Technologically driven disruptions tend to be constrained by technological and market uncertainties, enter on the low end, have economic unfeasibility, and resource scarcity. On the other end, market driven disruptions typically have economic feasibility and resources can grow quickly (Habtay, 2012).

When new markets are created, there can be a flood of entrants and then a quick die off of companies. Of personal interest to me is the wearable technology sector that includes Nike, Fitbit, Jawbone, Withings, etc. The idea of a “measured me” with regard to personal fitness is appealing; however, every time I think about purchasing one of these gadgets, a new model or new entrant pops up, and I’m left waiting for the Goldilocks moment where this one is “just right.” So, while the market plays out, I sit on the sidelines. Ironically, it can sometimes be a strategic advantage to be a later entrant. Occasionally companies are so enthused by their engineering capabilities that they over engineer the product with features not wanted by the consumer that adds complexity and cost (Markides, 2006). A savvy late entrant can come in as the major “die off” happens and the emergent winner is unsure winner what to do without the major competition, and they take that path of over-engineering.

This last mover advantage could appear to be at odds with the previous statements that established incumbents are at peril by ignoring potential disruptors. The key here is actively managing the uncertainty. It is a fine thing to do the analysis and choose not to go down a path or to wait, but it is a management mistake to choose a path by not making a choice.

Personal Reflection

As I think about what disruptors are playing out in my own life, clearly as a higher education CIO, the MOOC discussion above is one that has significant relevance, but we have covered that with enough detail. The thing that could elicit worry about the future of my career is that more and more “X.as a service” seems to be popping up. Software as a service, Infrastructure as a service, cloud this, cloud that. At times it is hard enough to be a part of the conversation when I am directly responsible for implementing an initiative. Vendors are marketing solutions directly to the end users now, and the IT group is perhaps superfluous. The perception–and many times the reality– is that involving us just slows things down. When those things involve regulatory issues (e.g., HIPAA, FERPA, PCI, etc.), then I am happy to be the speed bump to protect the liability of the university. The other times, I want to figure out how to be faster and more nimble.

Realistically, the X. as a service model is here, and my best play is to figure a way to embrace this methodology and let go of the physical part of the portfolio and find a way to transition the value of IT away from providing the basic infrastructure for these types of services. For me the challenge is how to transition staff expertise to being business experts to help the functional areas of the university get the most out of their use of technology. We have already started a continuous improvement culture where we are looking at Six Sigma methodologies and also Design Thinking methodologies to deliver value to students. We are becoming innovators who try to help reduce waste and make our marketing and services more like an Amazon experience than a DMV experience. Perhaps it has always been the case, but it feels like we in IT are the disruptors within the university, and that our best value is learning to speak the various languages across the functional areas so that we can help translate technical possibilities and opportunities into business needs. This is both on the cost reduction (e.g., business process improvement, managed contracts, etc.) and revenue generation side (e.g., marketing and mobile services, more targeted recruitment practices, better data around student retention, etc.)

As we disrupt, we also need to be mindful of our role in the organizational change process. If we do not implement well, or take in to account the human elements, then we are setting up for failure and even more resistance to new ideas in the future. If we can marry the opportunities of technological innovation and disruption with a human centered approach to make the transition to those opportunities more effective, then I believe we can successfully help guide the university through the challenges it inevitably faces over the next few decades.

Garrison, G. (2009). An assessment of organizational size and sense and response capability on the early adoption of disruptive technology. Computers in Human Behavior, 25(2), 444–449. doi:10.1016/j.chb.2008.10.007